How Macau’s casino culture isn’t always so golden

June 18, 2019

Macau investor Joe Lo talks about some of the social challenges that the gaming enclave still has to overcome, despite the city’s runaway economic success.

A few years ago, a Macau company I was involved with hired a Singaporean expatriate manager. Being new to Macau, and single, he had little to do outside of work. So he fell easily into the habit of trying his luck at the baccarat tables every night.

After three months of this, the poor fellow had seen nearly a year’s salary disappear into the drop box. We had to send him back to Singapore for his own good.

So what’s my general point? While the gaming economy has earned many people in Macau a tremendous living, it has also created problems: not just with gambling addiction but with challenges like traffic congestion, corruption, crime and social inequality.

Macau’s economy has boomed in the two decades since the government first welcomed international investment into the gaming sector. You only need to join the morning commute to realise how prosperous the place has become. Traffic jams were uncommon twenty years ago when there were 113,000 vehicles on the roads; today congestion is a daily headache with more than twice as many cars jockeying for space on just 321 kilometres of road.

Public transport hasn’t grown at the same pace either – often it’s easier to catch one of the free shuttle buses run by the casinos.

Residential property prices have run away too, rising more than four-fold since 2009, making housing largely unaffordable to many lower-income earners, as well as the elderly.

Before the government increased the minimum age for croupiers from 18 to 21 in 2012, many young people weren’t bothering to go to college either, because of the excellent entry-level salaries to be had.

Sure, the higher wages are attractive to school leavers but the downside is a shortage of people willing to train in the wider range of skills that Macau needs.

Public officials are busy working on longer-term solutions, like diversifying the economy through innovation, trade and finance in the Greater Bay Area. But for now, gaming is still so critical to the economy that they can do little more than put up a few warning signs in front of the honey-pot that is a career in gaming.

Despite official statistics showing that crime and corruption has been falling in recent years, there is also a nagging suspicion among residents that things aren’t improving. Perhaps that’s because of the headlines around Chinese president Xi Jinping’s anti-corruption drive, which prompted Macau’s casino revenues to plummet by a third in 2015, reinforcing the notion that the city’s prospects are too dependent on a tide of shady cash.

As my Singaporean colleague discovered, it’s easy to fall into the trap of more compulsive gambling. A 2016 survey from the University of Macau found that more than half of the city’s residents had participated in some form of gambling that year, an increase over the last such survey in 2013. While problem gamblers can voluntarily ban themselves from the casinos, only a few hundred people do so each year, despite some NGOs thinking that as much as 3-4% of the population may be at risk.

By comparison, more than 350,000 people (both locals and foreigners) have gone on the voluntary self-exclusion list in Singapore since the Marina Bay Sands first opened there in 2010.

For problem gamblers, the government offers 24-hour counselling hotlines. And in addition to raising the minimum age to enter the casinos, the long-standing ban against civil servants visiting them has been extended to all off-duty gaming sector workers.

But the prohibition against off-duty croupiers gambling themselves, and the self-ban, is not checked very rigorously. It largely depends on people policing themselves through the honour system. Good luck with that.

The government is well aware of some of the social dissatisfactions and that not everyone is sharing in Macau’s boom. Maybe that’s why it gives every citizen a MOP10,000 cash handout every year (about $1,240) as part of its Wealth Partaking Scheme, hoping that its citizens will be willing to accept some of the drawbacks to how Macau has developed.

In the meantime, increasing numbers of residents are voting with their feet – at least in choosing where they live. Many are moving across the border into Zhuhai, where property is significantly cheaper and much more spacious. I made the move to Zhuhai myself, leaving behind the gaudy signs for casinos and seedy saunas. Consciously or not, maybe I was worried that being inundated with advertisements for 24-hour gambling and wink-wink massages might warp my values after a while….

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